BMI Industry View Stabilising demand for Botswana's exports creates slightly brighter prospects for economic growth, which is reflected in our readjusted real GDP growth rate to 4.7% (up from 4.6%) in 2014. This modest optimism feeds through into the food and drink sector, as the consumer is expected to benefit from easing inflationary pressures and declining interest rates. High unemployment rates and a public sector wage freeze will prevent more significant growth in private spending over the forecast period.

We forecast a modest improvement in Botswana's growth prospects in 2014 mainly due to stabilising demand for diamonds, the country's key export, and low base effects. The latest data reveal that over the first six months of 2013 the value of Botswana's rough diamond exports posted growth of 9.7%, from US $1,677.2mn in H112 to US$1,840.2mn. This improved performance in the first half supports our view that growth will pick up from 2013. Exports of the precious stone account for around 70% of the total from the state, and so a nearly double-digit gain will help boost the overall figure, leading to our forecast of 8.0% growth in goods exports in 2013, followed by 10% growth in 2014.